We propose to study the evolution of hippocampal dysfunction in the early stage of psychosis (ESOP). Smaller hippocampal volume is one of the most robust structural brain abnormalities in patients with schizophrenia. In addition, there is now compelling evidence for an abnormality of hippocampal activity in schizophrenia. However, it is unclear when in the disease process hippocampal structure and function become abnormal and which regions of the hippocampus are affected. Clarifying these questions will improve our understanding of the disease mechanism and our ability to intervene in the disease process. We will recruit patients at an early stage of their emerging psychotic disorder to study hippocampal structure with high-field 7T magnetic resonance imaging and hippocampal activity with 3T magnetic resonance mapping of cerebral blood volume (CBV) and BOLD signal. We will measure performance on tests of relational memory, a form of hippocampus-dependent memory that is impaired in schizophrenia. We will follow patients for 2 years and measure the change of hippocampal volume in psychotic disorders. We predict that hippocampal activity is abnormal already at the onset of the illness and does not change significantly over the course of the illness. As a consequence of abnormal activity, memory function is already moderately impaired at illness onset. Over the course of the first 2 years of illness, the abnormally increase activity of the hippocampus leads to structural changes in the hippocampus. This structural change is associated with a further progression of memory deficits. To test our hypotheses, we will develop two types of high-resolution hippocampal maps. First, anatomical maps will distinguish the volume of four sectors and two regions throughout the entire anterior-posterior extent of the hippocampus. Using this high-resolution parcellation of the hippocampus, we will test the hypothesis that the anterior sector CA1 is primarily affected in psychotic disorder patients. Second, functional maps will assess CBV and BOLD signal in the four sectors and two regions of the hippocampus. With these maps we will test the hypothesis of decreased hippocampal inhibition in psychotic disorders. We will correlate the measures of hippocampal structure and activity with the performance on tests of relational memory, a form of hippocampus- dependent memory that is impaired in schizophrenia. The proposed longitudinal study design will allow us to study the timing of hippocampal dysfunction in psychotic disorders. The goal of this research project is the identification of hippocampal markers for the early diagnosis of psychotic disorders.